Evolution of ACOs in California
Berkeley ACO WorkshopMay 8, 2015
Jill Yegian, Ph.D.
Project Overview:Evolution of ACOs in California Partnership between IHA and UC Berkeley
Participating Physician Organizations‒AltaMed, Los Angeles‒Brown and Toland, San Francisco‒HealthCare Partners, Los Angeles‒St. Joseph Heritage, Orange‒Monarch, Orange
Funding from the Robert Wood Johnson Foundation, April 2013-March 2015
‒Part of a cohort of four grantees studying ACOs across the country
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Evolution of California ACOs
Areas of focus for investigation:
Structure
Payment arrangements
Strategy
Performance
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Activities and Timeline
1st round interviews with
health plan executives
Compare available P4P data for ACOs with other
medical groups
2nd round interviews with health plan
executives
2nd round interviews with physician organizations
“Total Expenditures per patient in hospital owned &
Physician Owned POs” published in JAMA
1st round interviews with physician organizations
Summer 2013
Fall 2014
Fall 2013
Summer 2014
Spring 2013
Oct. 2014
May2015
Issue briefs on ACO contracts, hospitals’ role in ACOs, patient
engagement
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ACO Product OfferingsMonarch Brown and
TolandHealthCare Partners
St. JosephHeritage
AltaMed
ACO Medicare FFS (Pioneer) (Pioneer) (dropped Pioneer, now MSSP)
ACO commercial PPO
ACO commercial HMO
Managed Medi-Cal
Medicare Advantage
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Case studies: Market context
California's long history in managed care ‒Competition from Kaiser
Strong interest in ACO arrangements by both POs and health plans in most areas of the state
Major expansion of Medicaid population in California‒Little ACO action in MMC/safety net
Launch of California’s exchange ‒Potential for local ACO approach (individual choice)
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Takeaways -- Pioneer Experience
Selective network for patient attribution more successful than “land grab” strategy
‒PCP vs. specialist‒Risk selection is major issue
Difficult to obtain inpatient, ED data for care management‒Lag in data from Medicare‒Hospital notification varies
Post-acute care transitions present a challenge‒SNF utilization difficult to manage
Mixed financial results‒Monarch and B&T continuing Pioneer, HCP shifted to MSSP
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Takeaways -- Commercial Experience
Many different variants‒HMO – shifting back toward full risk‒PPO – supplementing with care management fee (for all, or just
chronic)Both HMO and PPO have shared savings
‒No savings = no bonus, regardless of quality‒Targets vary – set against market vs. own trend‒Healthy population – harder to find savings (relative to Medicare)
Referral management critical to managing cost‒Lower cost AND higher patient satisfaction due to lower OOP costs (in-
network utilization)‒Maternity: can’t avoid admission, rely on steerage
Mixed financial results
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Takeaways -- Patient Engagement
Difficult to engage PPO and Medicare FFS patients (vs. HMO & Medicare Advantage)
‒Patients may not realize they are in an ACO, skeptical‒“Inducements” for beneficiaries prohibited
Physician-led communication with ACO patients trumps plan-initiated outreach
‒Plans delegating care management‒Physician organizations may not be familiar to beneficiary‒Doctor’s office needs to lead, with support from PO and plan
Little explicit focus on disparities to date
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Surprise Finding: Hospitals’ Role
Hospitals less active than POs & plans on ACOs‒Varying success among POs in case study on developing hospital
partnerships‒Several hospital systems in California pursuing vertical
integration strategy (plan/delivery system)‒New models emerging based on hospital network▪ Vivity HMO: Anthem’s joint venture with 7 hospitals in SoCal
Notable exception: Dignity Health Hospitals ‒Active pursuit of ACO strategy over last several years ‒CalPERS ACO: Dignity, Hill Physicians, Blue Shield of CA‒New initiative announced in October with Hill Physicians, Aetna
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JAMA Paper, October 2014
Total Expenditures per Patient in Hospital-Owned and Physician-Owned Physician Organizations in California• Authors Jamie Robinson (UCB), Kelly Miller (IHA)
Findings• Physician organizations (POs) owned by local hospitals are 10%
more expensive than those owned by member physicians• POs owned by multihospital systems are 10% more expensive than
those owned by member physicians
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Issue Briefs – May Publication
Four IHA Issue Briefs to be published in the next month 1. Imperatives and Challenges of Physician- Hospital Alignment
(Jamie Robinson)2. Referral Management and Disease Management in California’s
Accountable Care Organizations (Jamie Robinson)3. ACO Contractual Arrangements in California’s Commercial PPO
Market (Tom Williams)4. A Large Community Health Center Adapts to a Changing
Insurance Market (Jill Yegian)
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Research Team
Tom Williams – VP & General Manager, Accountable Care at Stanford Health Care; (during study: CEO, Integrated Healthcare Association) (Co- Investigator)
James Robinson – Leonard D. Schaeffer Professor of Health Economics, UC Berkeley School of Public Health, Director, Berkeley Center for Health Technology (Co-Investigator)
Jill Yegian – Senior VP, Programs, IHA (Co-Investigator) Kim MacPherson – MPH Program Director, Health Policy and
Management, UCB School of Public Health (Researcher) Kelly Miller – Program Manager, IHA (Project Manager and RA)
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